O’Neill said BHP Billiton needed to get over its “colonial era” mentality, and appreciate that Papua New Guinea was an independent nation.

He said Australia should negotiate with Papua New Guinea in the “same, mature and reasonable way” numerous other Australian resource companies do.

“Instead of seeking the intervention and assistance of the Australian government, the company should negotiate with my government, and me, as Prime Minister,” O’Neill said.

“The article claims that I had blocked the granting or extension of exploration licences because it would not agree with my proposals regarding the determination of the board of PNG Sustainable Development Programme.

“This is totally and utterly false. It is just dishonest,” the prime minister said, according to the Post-Courier.

“BHP Billiton surrendered the licences entirely on its own accord. It did so when it made a decision early last year not to invest in Papua New Guinea – after I had personally invited the company to meet with senior cabinet ministers, including myself, to consider investing in PNG.

“We did everything possible to encourage the company, just as we encourage and assist other major investors all the time. They decided not to take up the offer.

“That occurred before the mid-year elections, and eight or nine months before I made my comments on Professor Ross Garnaut,” he said.

‘Inaccurate comments’
O’Neill said the central issue was not Professor Garnaut and his “inaccurate and ill-informed comments” on why he wanted the issues surrounding the way the board of PNGSDP was appointed to be changed.

“The central issue is this – 11 years ago, BHP Billiton was done an enormous favour by the then PNG government and allowed to exit ownership of the Ok Tedi Mine without accepting any financial or moral, responsibility for the enormous environmental and social damage that occurred in the 20 years it operated the mine,” he said.

“Surely, 11 years on, there can be no reasonable case made out to justify BHP Billiton continuing to exercise effective control over the PNGSDP, and as a consequence, the Ok Tedi Mine itself.

“The claim by BHP Billiton and by Professor Garnaut that I want the PNG government to get its hands on the funds of the PNGSDP is personally offensive. All I have sought, and will continue to seek, is negotiations that can lead to BHP Billiton ending a role that it is not justified to continue to play.

“My position is supported by my government, and I believe by the national Parliament and the people of the Fly River, Western Province,” he said.

O’Neill said BHP Billiton should reflect on the appalling environmental damage that occurred during its management of the Ok Tedi mine, and the terrible consequences for the people of the Fly River area – consequences which continue to be felt today.

“The PNG government of the day decided just over a decade ago to legislate to allow BHP Billiton to walk away from any responsibility for the damage that was caused during its management of the mine.

“That spared the company the massive costs, and international humiliation it faced because it effectively ended compensation claims by landowners and local communities along the Fly River.

“The provisions that allowed the company to effectively control the appointment of the board of the PNGSDP, and therefore continue its influence over Ok Tedi, were generous. There can be no justification for their continuation,” he said.

“The Australian government is well aware of the position of my government. The legislation that effectively let BHP Billiton off the hook is PNG law, not Australian law,” he said.

O’Neill said he rejected the claims in the article that his position was damaging the PNG investment climate.

“This is total nonsense. Last month I addressed 1400 mining, oil and gas leaders, and financiers and analysts, in Sydney, at the annual PNG Mining and Petroleum Conference.

“At that conference, there was strong confidence expressed about PNG as a country in which to invest, and in the range of policies my government has in place, and is committed to, to give investors confidence and certainty.

“The claim that this issue has undermined confidence could not be further from the truth,” O’Neill said.